I was discharged thru Chapter 7 in 2011. A mortgage holder

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I was discharged thru Chapter 7 in 2011. A mortgage holder on property owned in NC did not foreclose, though the debt was discharged. I am still on the deed, though have presumably no claim to the property. The lender continues to pay the taxes, though does not pay HOA dues. Do I have any trailing liability on the property to include HOA fees and accidents? Thanks

Hello I am a licensed attorney here to help you with your question, please review my response and do not hesitate to ask for clarification

WALLSTREETESQ :

Did you surrender the property to the lender?

Customer:

yes, as far as I know. It was a homesite

WALLSTREETESQ :

This is a common problem, under the Bankruptcy Code 523(a)(16), you are still responsible for the HOA fees until the foreclosure takes place. The Code implies that until you no longer have legal, equitable or possessor ownership in the unit, you owe the fees. This can be fees on a home, condo or some other unit that has Home Owner Associations fees. This applies even if you have moved out and are no longer living at the residence. Thus, any HOA fees or costs including late fees you are still responsible for.

Now let’s say the unit was foreclosed on and you still live in the unit. Since you are still living there you still would be responsible for the HOA fees.

All the following must be met:

1. You are still responsible for all debt you have incurred involving the HOA fees until the date of filing bankruptcy. If the court grants the discharge, then the fees are dismissed.

2. All HOA debt incurred after filing that you do not pay, you are still responsible for until:

e. The lender has taken legal possession of the unit. (In other words, your name is XXXXX XXXXX on the title).

WALLSTREETESQ :

If your name is XXXXX XXXXX the deed, you need to contact the lender and try to quit claim the deed to them, so they are the new owner,

WALLSTREETESQ :

If not you can be sued for the HOA fees after the bankruptcy

Customer:

My problem is that the HOA dues were incurred post discharge on the debt, and it is just a lot. So because I am still the "owner" I owe the dues? strange...

WALLSTREETESQ :

Yes, it is a strange law, and only applies to the condos, the law however is the law, and you need to stop the charges as soon as possible, you can even contact the management company and advise them of the matter, and see if they will take the condo from you.

Customer:

I am sorry, it is a homesite. just raw land in a sbdv

WALLSTREETESQ :

If they have association fees you would still be liable.

WALLSTREETESQ :

If their is no association and is only taxes, then you would not.

Customer:

crazy. So, call the lender and ask to quitclaim the deed to them. If they say ok, fine. If they say know I owe association fees forever? Or at least until the lender sells the property? Am I responsible for selling the property?

WALLSTREETESQ :

What typically happens is when the property is sold, the HOA fees would be paid as well,

WALLSTREETESQ :

You would not be forced to sell it, the bank would, but if you quit claim the deed to them they would be liable for all fees

Customer:

I also assume I am responsible for any slips and falls, etc.

Customer:

One last question, why would a lender foreclose if he would only have to pay taxes to maintain his lien?

WALLSTREETESQ :

If your name is XXXXX XXXXX deed it is possible, however the lender with the mortgage usually pays for insurance on the property as well,

WALLSTREETESQ :

The lender would not have their mortgage paid,

WALLSTREETESQ :

They do not keep properties, they rather sell them to get the note off the books

Customer:

the lender though cannot sell the property if I am the owner of record, correct?

WALLSTREETESQ :

they can foreclose as the mortgage was not paid, you can sell it, but need mortgage approval,

WALLSTREETESQ :

they would not be able to sell it without your signing off the deed

Customer:

Wow, I could be liable forever... Ok, thanks for your help

WALLSTREETESQ :

I would contact the lender and advise them you want to do a quit claim deed this way they save money on a foreclosure,

WALLSTREETESQ :

Or you can try to short sell the property if the lender wants,

Customer:

That make sense. At least there is something in it for them. Thanks again.

WALLSTREETESQ :

good luck, and if you have any further questions please do not hesitate to ask.

WALLSTREETESQ :

If satisfied please provide us with positive feedback.

Customer:

Thank you. This is a helpful service and you have been great.

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